Select

China cuts taxes, sees 'tough struggle' as growth slows

Posted on Friday, March 08, 2019 by Judy Cobb

China cuts taxes, sees 'tough struggle' as growth slows

Besides cost cutting, to boost growth, the government announced RMB 577.6 billion (US$86.12 billion) in infrastructure investment, an increase of RMB 40 billion (US$5.96 billion) compared to past year. The shift to a band from the previous practice of using a point figure gives policy makers room for maneuver and compares with last year's "about" 6.5 percent goal.

Beijing has also stepped up its rhetoric against any independence movements in self-ruled Taiwan and continues to assert its vast territorial claims in the disputed South China Sea and East China Sea.

Proposed tax cuts of up to 2 trillion yuan ($300 billion) would put "significant spending power" in the hands of consumers and companies and help to buoy sagging demand for autos, household appliances and other goods, said Mr. Varathan.

A separate government budget released on the same day said that the science and technology budget would be RMB 354.31 billion (US$52.88 billion), an increase of 13.4 percent year-on-year.

Beijing will also pick up spending, with China's targeted fiscal deficit set to increase to 2.8 percent of GDP, from 2.6 percent a year ago.

The finance ministry also said the country's defense budget this year will rise 7.5 percent.

"China will face a graver and more complicated environment as well as risks and challenges that are greater in number and size", Li told the National People's Congress.

He added that China-US economic and trade frictions "had an adverse effect on the production and business operations of some companies and on market expectations".

China's central government said Tuesday that it will lower the growth target for the country's GDP, the latest sign that the world's second biggest economy is in the grips of a major slowdown.

To combat problems facing small business, Beijing will raise the Value-Added Tax threshold to 100,000 yuan ($15,000) in monthly sales, from 30,000 yuan ($4,500) and direct large state banks to lend 30 percent more to small firms this year. A year since removing any legal barrier to remaining China's leader for life, Xi Jinping appears firmly in charge, despite a slowing economy, an ongoing trade war with the USA and rumbles of discontent over his concentration of power. "They need to strike a balance between boosting economic activity and not restart another debt-fuelled boom".

He also said the China-US trade talks have made substantive progress on many issues of common concern, and both countries and the worldwide community have responded in a positive manner.

Separately, China's top banking regulator said on Tuesday Beijing could "absolutely" reach an agreement with the United States on opening up its financial sector, even as the country's commerce minister admitted talks with Washington had been hard.

But in signs that tensions from the tariff battle could soon ease, sources tell CNBC that the US and China are now in the "final stages" of a trade deal that could end this month.

Popular news

Kate Beckinsale's ex urges Pete Davidson to 'run'
The two were spotted together again in September 2018 with another friend while attending a comedy show in Los Angeles. After they ended things, Pete started going out with none other than Kate Beckinsale! "I hope they're happy".Friday, March 08, 2019

Tottenham hope to play Champions League quarters at new home
After his first half-heroics in goal, Spurs goalkeeper Lloris said the Premier League side do not want to stop now in Europe. However, despite a mature performance, Pochettino denied suggestions his team had proved they can step up at this level.Friday, March 08, 2019

Second man seems to be free of HIV after stem cell transplant
But that treatment would cover only those types of HIV that rely on the CCR5 surface protein to break into the immune cells. The London cure report comes more than 10 years after the first case , known as the " Berlin patient " tested negative.Friday, March 08, 2019